We develop a model of logit demand that extends to a multi-firm industry the traditional duopoly framework of network competition. Firstly, we show that incumbents establish inefficiently the reciprocal access charge below cost when they compete in prices, but they behave efficiently if they compete in utilities. Secondly, we study how incumbents determine the industry-wide access charge under the threat of entry. We show that incumbents may accommodate all possible entrants, only a group of them, or may completely deter entry. When entry deterrence is the preferred option, incumbents distort the access charge upwards. JEL Classification Numbers: L41; L51.

The impact of aggregators on news outlets is ambiguous. In particular, the existing theoretical literature highlights that although aggregators create a market expansion effect when they bring visitors to news outlets, they also generate a substitution effect if some visitors switch from the news outlets to the aggregators. Using the shutdown of the Spanish edition of Google News in December of 2014 and difference-indifferences methodology, this paper empirically examines the relevance of these two effects. We show the shutdown of Google News in Spain decreased the number of daily visits to Spanish news outlets between 8% and 14%, and that this effect was larger in outlets with less overall daily visits and a lower share of international visitors. We also find evidence suggesting that the shutdown decreased online advertisement revenues and advertising intensity at news outlets. We then analyze the effect of the opt-in policy adopted by the German edition of Google News in October of 2014. Although such policy did not significantly affect the daily visits of all outlets that opted out, it reduced by 8% the number of visits of the outlets controlled by the publisher Axel Springer. Our results demonstrate the existence of a net market-expansion effect through which news aggregators increase consumers' awareness of news outlets' contents, thereby increasing their number of visits.

No abstract

The impact of aggregators on news outlets is ambiguous. In particular, the existing theoretical literature highlights that although aggregators create a market expansion effect when they bring visitors to news outlets, they also generate a substitution effect if some visitors switch from the news outlets to the aggregators. Using the shutdown of the Spanish edition of Google News in December of 2014 and difference-indifferences methodology, this paper empirically examines the relevance of these two effects. We show the shutdown of Google News in Spain decreased the number of daily visits to Spanish news outlets between 8% and 14%, and that this effect was larger in outlets with less overall daily visits and a lower share of international visitors. We also find evidence suggesting that the shutdown decreased online advertisement revenues and advertising intensity at news outlets. We then analyze the effect of the opt-in policy adopted by the German edition of Google News in October of 2014. Although such policy did not significantly affect the daily visits of all outlets that opted out, it reduced by 8% the number of visits of the outlets controlled by the publisher Axel Springer. Our results demonstrate the existence of a net market-expansion effect through which news aggregators increase consumers' awareness of news outlets' contents, thereby increasing their number of visits.